Klarna applies for a US banking license, its boldest move yet in America

Klarna, the Swedish company behind one of the world's largest buy now, pay later (BNPL) services, has applied to US regulators to open its own bank. It filed the application in Utah, tech.eu reports.

Why does Klarna want a US banking license?

Klarna has long pitched itself as a full-fledged fintech player rather than just an installment-payments service, and a banking license application is a logical step in that direction. The company is betting that Washington's current, more fintech-friendly policy will open up the US market, where other European fintech companies have previously stalled in their attempts to gain a foothold.

• The banking license application was filed with regulators in Utah
• Klarna is a Swedish giant in the BNPL (buy now, pay later) market
• The company is counting on Washington's more fintech-friendly policy
• Other European fintech companies have previously stumbled in the US market
• The source of the information is tech.eu

Why is this being called Klarna's boldest move?

Applying for its own banking license is a far more fundamental step than the partnerships with existing banks that BNPL services typically build their payment products on. A license of its own would let Klarna operate in the US as an independent, regulated bank rather than only as an intermediary that depends on partner banks. That is why sources describe this as the boldest move in the entire history of Klarna's presence in America.

What this means

If the application is approved, Klarna will gain a status in the US comparable to the one that already lets it operate as a bank in Europe. It would then be able to rely on its own regulatory footing instead of partner-bank arrangements, reducing its dependence on third parties in one of the most competitive fintech markets in the world.